Member Info for Orangetree

Skipsharer: Oh, I've been holding the shares for a long time and resisting the urge to sell when it reaches over £1. The reason is that one of my friends bought ASOS back in the early 2000s at 20p and sold at £50. So, I'm hoping OPTI would do the same.
BTW, I bought the shares back in late October or early November 2014. My reasoning was purely down to SOH's reputation.
Also, BTW I take no offence.

I play 'devil advocate' in my last few posts. So, if OPTI's business pans out well and the customer gives it the thumbs up, we are looking at 'sky the limit' for Optibiotix. I can see health services like the NHS recommending this product in the next two years. Also, I can definitely see the share price spiking to £10 per share or more on expectations of £100m sales and £50m cash profit by 2024/25.
That's why this year and next year are crucial times for OPTI.

Peace!

Also, thanks for the link on the other partners, Belgrano.

Belgrano, I like to reiterate, I'm not a hater. I own shares in this company and like to add my two cents when I have something to say (mostly to help people in the forum to think about the business side of their investment rather than staring at the daily movement of the share price). I also like to critique what I own and take the emotion out of investing. If you are wondering, I am a long-term shareholder (having bought it around 12 pence per share).

Regarding the £3 to £5 per pack, is that the 21 sachets costing £15 each? Better yet, do you have the link?

Also, the next two years its make or break for OPTI because the customers have the final say if their slimbiome works. If customers around the world aren't satisfied with the products, things can go downhill rather fast and all these deals will unwind. That's the reality of business.

Again, I'm not a hater or looking to push investors or readers emotion in this forum. Just stating the reality.

Does anyone know how much OPTI gets in licenses for each Slimbiome product sold at Holland and Barratt?

I've been thinking about the OPTI's business model and something came to light. Let's look at an example like Holland and Barratt. H&B annual sales are £600m. Let assume OPTI get 7% for each product sold. In the first year, Slimbiome sold £1m, that means OPTI gets £70k in revenue (7%*£1m). If people like the product, then it sold £5m the following year, giving OPTI £350k in sales.

I know H&B is one of many companies that OPTI would be working for. But to put things into perspective, in order for OPTI to generate £10m their partners need to sell £142m worth of products. For OPTI to generate £200m in revenue, then their partners need to sell close to £3bn worth of products. I know SOH says the margins are high and so forth.

Although their partners generate hundreds of millions or billion dollars in sales, a small percentage of these sales uses OPTI biotechnology. The reason I believe valuation is still low is down to the uncertainties of how well the products are selling.

As a shareholder with 6,000 shares, I'm happy to hold for a few years. I know from the beginning the shares were overvalued and I sold a bit. But, I'm no fool. Opti will need some time to become a real business.
Regarding revenue, it is vanity.
Any business worth their salt should be producing cash profit after investing. That's the real metric.
So, even if Opti does £10m in revenue, it should 'hypothetically' produce cash profit, based on all the presentations and interview Stephen O' Hara has given.
I would be shocked if Opti doesn't produce a cash profit with £2m-£3m in sales. Then, again, SOH could say they're investing and expanding the company for greater things. These narratives I heard before.
The H&B venture is a step in the right direction, but realistically OPTI needs to be in Boots, all the supermarket chains in the UK and Worldwide.
It wouldn't surprise me if OPTI issue equity for the expansion reason or the R&D reason or any other reason. Although reducing their SKIN's stake was a big surprise, given it has realised any real value yet. Thought they were going to keep the stake until SKIN start producing some real results.
More realistically, OPTI needed the cash. BTW, SOH did say he was going to reward us with a special dividend, though the disposal is worth less than 1p per share, or in my case £53.

As for Paul Scott, he can what he wanted, people shouldn't be bothered. OPTI still has to prove the concept and able to sell it to the general public. I actually think they need to educate the public and run a campaign to make people aware there is a genuine product for weight loss. Advertise it on the billboards and near the train stations, that would spark curiosity.

2020 and 2021 should be turning OPTI into a real business, and no more releasing RNS telling shareholders you sign this agreement or that agreement without any real monetary value, it's pointless!

Do you know that SOH paid for his 10 million shares or was it given to him for free by the company, as the founder?

My view is if this company's financials are going through the roof in the next two or three years, then SOH should purchase at least £40k worth of shares or more to put some money where his mouth is.

Otherwise, shareholders and the market will view this as another "pump and dump" stock.

With the shares touching 50p for the majority of the day, Why hasn't SOH bought shares in the company?

I will give SOH, a fortnight to take advantage of this great opportunity, otherwise, I'm doubtful this firm will succeed.
I'm not asking a lot, but it should be a meaningful amount to signal has real prospects, not just words and faith.

A classic case of buying the rumour and sell the announcement.
People have too high an expectation, despite a 280% growth from last year. If this growth rate sticks in 2019, then revenue will be £1.5m.

Therefore, it isn't enough to justify the £70m valuation. I expect the share price to trade sideways until we get expectations of revenue growth close to 500% and a six-figure profit.

The shares are normally priced into the future, but sometimes it goes too far into the future and loses grip on reality.

Patient and intelligent is key to investing success, not irrational actions.

People covering their shorts and then selling stock.

After what happened to Flybe, I wouldn't be surprised if Debenhams get taken to the cleaners.

Mike is like Branson, that's how billionaires stay billionaires, they acquire assets for peanuts and sell near the top.

That's my point. He makes false statements in front of MPs to imply his generosity. Behind the scenes, MA really wanted to buy the whole company for peanuts!

Either that or DEB management knows that trading is much worse than expected and we haven't heard the worst news that will likely come out after Christmas.

Although I think Mike Ashley investing £40m for 10% is a clear lie. Its to boost his image as a generous businessman. It wouldn't surprise me if he offers £40m for the whole company. DEB management can't say anything if these rumours are true.

More like 1p per share, if we take Mike Ashley's words that DEB won't survive beyond BREXIT and that's under 100 days.

It appears my 2020 prediction of £25 came true far too early!
Now, things are looking bad for ASOS. Earnings margin falling from 4% to 2% is a nail in the coffin because there is no way profit is going to grow, especially in 2019.

If ASOS continues their capacity expansion at a LOW margin environment, the online retailer is going to incur borrowings at a rapid pace unless management reverses course and focus on cutting costs and streamlining its existing business operations.
The return on new capacity investment must be at an all-time low.

If ASOS pay dividends, I guarantee you the shares would be trading around £15 because it would have incurs hundreds of millions of pounds in net debt.
It makes little differences for the medium-term and short-term holders.
A long-term holder (more than 10 years) will see most of their original investment recouped from dividends.

Then again, ASOS would not have grown this fast, if it pays a dividend.

Look Amazon doesn't pay a dividend and it became one of the biggest companies in the world because they have their hands on every cookie jar.

You don't need a bank to tell you what's going on at ASOS. It took me two hours to analyse the fundamental trends and come up with that conclusion.
Unless manages to improve their profit margin, the increase in debt will weigh on its equity valuation. For example, its enterprise value will stay roughly the same, not because of its market cap., but it is held up because of the increase in net debt.

I have written about ASOS a few months ago, telling readers to not buy at £55 per share, but I didn't know it was going to drop this far and this soon. I thought the best time to short was after the Santa rally when ASOS is comfortably trading around £60 per share.

I noticed a BIG CHANGE in ASOS fundamentals. That's NEGATIVE FREE CASH FLOW, which wiped out their cash reserves. Now, I expect the company to leverage their balance sheet as they expand at a rapid pace to grow profits.
Without this increasing amounts of capex, the profit growth rate will decrease and causing the share price to fall (like they did in 2015). But there is so much ASOS can expand and the profit margin is likely to fall to 3%. Unless there is a host of retail bankruptcies, I can't see ASOS going back to £70 per share. However, I do see ASOS stabilising around £30 in 2019. If balance sheet worsens, then expect the shares to trade around £25 in 2020.
Key metrics: free cash flow and operating profit margin.

Check out my article under Orangetree in Stockopedia.

If only there was a market to speculate on companies issuing new shares, I would be a very rich person.
Given the collapsing share price, I expect the company will try to issue between 2.5 bn to 4 bn new shares, that's 15 times the original shares outstanding.

If they can't get funding, expect administration. Also, don't expect the government to bail it out because they got Brexit problems on their plate that's thousands of times larger.

Based on their credit rating of BB-, I expect the yield to come in around 6%. However, the share price dilution is becoming too apparent, it's the age-old theory of debt overtaking equity, and I mean "tangible equity" (minus the goodwill).

If Victoria is replacing the existing loans with debt (so they say), the sudden slump could provide a 50% upside, but if its debt added on to existing debt, then expect the shares to touch £3. Also, if they continue acquiring more businesses without any care about consolidating as a group, then this company is a sell.

Here are the following conclusions from today’s results are:
1). The “real” cost savings will be the cancellation of its dividends altogether, and the big reduction in capex to £70m would immediately save £100m.

2). Digital sales growth won’t be the saviour of the company because it cannibalises their retail store sales.

3). Today’s £300m writedowns in goodwill are LONG overdue. However, given the 80% decrease in ADJUSTED net profit in the past six years, you should expect another £200m to £300m write off in goodwill next year or spread over a few years.

4). Debenhams store closure strategy of 50 stores in 3-5 years is slow, given their dire situation, but the idea of opening 20 new ones at this stage is a little far-fetched.
If management goes ahead and opens 20 new stores, expect capex to rise in the future.
5). The retailer has no real assets, such as freehold to dispose and reduce debt. It’s why they are targeting cost savings.

6). Valuation appears cheap, despite a big decrease in profit and cash profit. Debenhams price to operating cash flow is BELOW one, compared to three times multiple.

Twitter: @Wh_biz32

Surely offering £20k for an equity research firm is a conflict of interest that should be rooted out. Research firms should be paid on their results. Otherwise, it is a P.R. campaign underway to lift the share price so they can raise more money (i.e. another £600k or more).

Basically, that £20k does represent a return on conning the public. It's a shame they couldn't do it with their mining operations.